Edwin Hu

Proud to see my first law paper out in the SLR. Thanks to the wonderful editorial team for their hard work, and everyone who provided feedback!

Prof. @_edwinhu_’s co-authored paper analyzing how shareholders use customized proxy advice won the @NFA_CA Best Paper Award in Corporate Finance. law.virginia.edu/news/202410/pr…

Institutional investors rely heavily on customized recommendations from proxy advisors. Customization helps funds express their ideologies and allocate attention effectively, from @_edwinhu_, @nmalenko, and Jonathon Zytnick nber.org/papers/w32559

Empirical law and finance expert Edwin “Eddy” Hu, a former economic adviser to an SEC Commissioner who has already shaped the field, will join the #UVALaw faculty on July 1. @_edwinhu_ law.virginia.edu/news/202405/fi…

Posted: Custom Proxy Voting Advice, corpgov.law.harvard.edu/2024/05/23/cus… #corpgov

@AnthonyLeeZhang And of course secondary trades on an exchange are normally not public offerings because they don’t involve the “issuer” or their “underwriter.” By contrast a direct listing is a programmatic sale that involves an issuer.

@AnthonyLeeZhang Yes, once you have answered the threshold question of is it (ever) a security, you look at whether the offering was illegal. It should have come out the opposite. Institutional sales likely exempt (not a “public offering”), but programmatic sales definitely a “public offering.”

Not a lawyer and definitely not legal advice, but isn't the following logic in the XRP case kinda self-referential - If I sell XRP on exchanges only, there is no reasonable expectation of profit hence XRP not a security - Hence exchanges can list XRP? Since XRP not a security?

@kadhim yeah it makes no sense. a direct listing is a programmatic sale via an auction.

So when Ripple sold to sophisticated investors, those investors were protected by securities laws, but when it sold its token to retail, those unsophisticated investors weren't? It's pretty much the inverse of our normal understanding of how securities laws function

The implications of the ruling in SEC v. Ripple seem rather curious. The judge finds that Ripple's token was a security when sold to institutional investors, but not to retail investors on exchanges. storage.courtlistener.com/recap/gov.usco…

@AnthonyLeeZhang @theshah39 A DAO that can—through tokenomics, pricing, or vote weights—allocate value would potentially be a viable for-profit member-investor hybrid entity. I suspect most DAOs will degenerate into investor-owned entities unless they are basically run as nonprofits.

@AnthonyLeeZhang @theshah39 Voting weights maybe a second or third-best option, but not clear that "loyalty shares" model of Curve approximates that either.

Cool post on tokenomics by @theshah39 and Lucas Baker at Jump! jumpcrypto.com/token-design-f…

US regulators are expanding their crackdown on misleading labels of investment products with a probe focused on whether managers of funds marketed as sustainable are trading away their right to vote on ESG issues bloomberg.com/news/articles/… via @business

Econ research in a nutshell.

But the argument that proxy votes "impose" on firms makes little since since proposals are precatory under Delaware law.

To be sure, there may be reasons to prefer engagement over proxy voting as there is at least correlative evidence that the former is effective (in Europe). doi.org/10.1016/j.jfin…

@SMTuffy Yup. Levered/inverse was the main thing our office was concerned about. I was under the impression that this would be addressed by other rules. The surprise (to me) is that the industry got these through before the SEC/FINRA added those safeguards. sec.gov/news/public-st…

@SMTuffy In trying to streamline the ETF registration process (and derivatives rules) the SEC (inadvertently) opened the door to these products. Funds no longer have to seek individual exemptive relief or "approval" as long as they meet certain reqs.

@matt_levine @IvanTheK perhaps still trying to get firms like Coinbase to register or seek exemptions (but seems especially unlikely with today's Coinbase rulemaking petition). bloomberg.com/news/articles/…

@IvanTheK but like ... to the extent that exchanges are listing obviously equity-like governance tokens and VCs are blowing them out to retail, that is just much more important than one little insider trader and it is weird to start here.

this is a weird way for the SEC to say that Coinbase is running an illegal securities exchange? sec.gov/news/press-rel…

@AnthonyLeeZhang Also, I'm wrong about the liquidity externalities (at least according to this paper). academic.oup.com/rfs/article-ab…

Also true that some forms of tradfi HFT competition are not wasteful, like colocation auctions twitter.com/_edwinhu_/stat…

Random thought (which I might substack in the future): Gas fee races/MEV competition has many similarities to "speed races" in tradfi HFT. However, one surprising thing is that gas fee races are less socially wasteful than HFT speed races!